Cisco's had a rough couple of months, but the enterprise communications market would appear to be a bright spot, according to a report on the 2010 PBX market from the Eastern Management Group. Eastern Management's president and CEO, John Malone, sums up that report's key findings on No Jitter this week.
The big eye-opener from John's article is a chart showing market share leaders. According to Eastern Management, Cisco has regained the substantial lead that it had held over Avaya a few years ago, before the latter's acquisition of Nortel gave it a combined share that flirted with the leadership spot. Eastern Management now estimates that Cisco's market share for 2010 was almost 35%, with Avaya coming in just over 23%.
Cisco recaptured ground by having an extremely strong 2010 in the IP-PBX market, according to Eastern Management; Malone says Cisco's line shipments grew 37% from 2009 to 2010. Which is not to say that Avaya had a bad year--just the opposite, according to Malone: Avaya's 2010 sales exceeded the 2009 Avaya-plus-Nortel total by 5%. That's impressive when you consider that the Nortel bankruptcy filing sent that doomed vendor's customers fleeing for the exits faster than the words, "...Starring Mel Gibson and Jodie Foster..." can empty out a theater.
What I took away from John's article is that, on the ground, the enterprise communications market is still much more about replacing PBXs and growing the existing IP-PBX deployments than it is about enterprises making their next moves around Unified Communications and BYOD-style mobility. John's article is a counterpoint to the Tom Nolle piece that ran on No Jitter last week, in which Tom aired his clients' frustrations with the migration path they see in front of them.
I'm not sure I see this as either a contradiction or a problem. I think John's and Tom's articles point us toward two different segments of the market, and two different orientations: Tactical, in the market growth in the Eastern Management report, and strategic, in the aspirations that Tom Nolle described among his consulting clients. Enterprises may be planning for the day when they don't need a PBX; but today, the only solution out there to provide bulletproof voice communications to an entire set of users is the PBX—so enterprises are being forced to do something that they may see as less than ideal in the long term.
One final factor that's at play here: Cost. "The largest justification for new PBX purchases in 2010 was IT managers choosing to reel in operating expenses, and doing so by buying PBXs with functionality equipped to do just that," Malone writes. He goes on to talk about SIP trunks and SIP phones, which may not have interoperability but can lower costs. And certainly there's also potential for cost savings in replacing out-of-support, ancient PBXs whose maintenance costs have gone up, and going with extensions added onto an existing IP-PBX system within the enterprise.
And oh yeah, IP-PBX prices are dropping, to an average street price of $529 per line before other incentive programs--which abounded from virtually all vendors. In 2007, the year Microsoft's Jeff Raikes predicted cost would drop in half by 2010, the average line cost $691, so the Eastern Management figures show that Raikes' prediction was not fulfilled. But the trend is still downward.
There's lots more detail in John Malone's feature spotlighting the 2010 numbers. I encourage you to read the whole thing.
